News

Weyerhaeuser Closes Sale of Containerboard Packaging Assets; Announces Second Quarter Results

FEDERAL WAY, Wash.-(Business Wire)-August 5, 2008 - Weyerhaeuser Company (NYSE:WY) today reported a net loss of $96 million for the second quarter of 2008, or 45 cents per diluted share, on net sales of $3.6 billion.

This compares with net earnings of $32 million, or 15 cents per diluted share, on net sales of $4.3 billion for the same period last year. -0- *T SIGNIFICANT SECOND QUARTER 2008 AFTER-TAX ITEMS After-Tax Gain Gain (Charge) per (Charge) diluted share ($ millions) (dollars) Real estate impairments, reserves and land-related charges ($206) ($0.98) Ownership restructuring of Uruguay assets $101 $0.48 Changes to post-retirement benefits $32 $0.15 Restructuring charges, primarily corporate staff ($24) ($0.11) Closures and asset impairments, primarily for Wood Products ($20) ($0.09) Release of tax liabilities $14 $0.07 Excluding these items, the company earned $7 million, or 3 cents per diluted share, in the second quarter of 2008. *T -0- *T SIGNIFICANT SECOND QUARTER 2007 AFTER-TAX ITEMS After-Tax Gain Gain (Charge) per (Charge) diluted share ($ millions) (dollars) Closures, asset impairments and sale of Canadian distribution facilities ($30) ($0.14) Early extinguishment of debt ($27) ($0.12) Legal settlements and a contract termination ($25) ($0.12) Sale and closure of box plant sites $15 $0.07 Costs related to Domtar transaction ($5) ($0.02) Excluding these items, the company earned $104 million, or 48 cents per diluted share, in the second quarter of 2007. *T

"We continue to position our company for future growth," said Daniel S. Fulton, president and chief executive officer. "This week we took a significant step to focus our portfolio by completing the transaction with International Paper, a value-creating move for shareholders.

"Unprecedented conditions in the housing market are reflected in the second quarter results of our Real Estate, Wood Products and Timberlands businesses. In addition, high oil and energy prices have adversely affected all of our businesses. We're not satisfied with the results and are continuing to take restructuring action consistent with our more focused portfolio." -0- *T SUMMARY OF SECOND QUARTER FINANCIAL HIGHLIGHTS Millions (except per share data) 2Q 2008 2Q 2007 Change Net earnings (loss) ($96) $32 ($128) Earnings (loss) per diluted share ($0.45) $0.15 ($0.60) Net sales: From continuing operations $2,174 $2,959 ($785) From discontinued operations $1,436 $1,375 $61 Total net sales $3,610 $4,334 ($724) *T

Weyerhaeuser has reclassified the Containerboard, Packaging and Recycling operations as discontinued due to the Aug. 4 sale of the segment's assets to International Paper. Weyerhaeuser's Australia operations have also been reclassified as discontinued operations due to the sale of these assets that occurred in July. The net sales and revenues of these operations are included in net sales from discontinued operations for the second quarters of both 2008 and 2007. -0- *T SEGMENT RESULTS FOR SECOND QUARTER (Contributions to Pre-Tax Earnings) Millions 2Q 2008 2Q 2007 Change Timberlands $108 $142 ($34) Wood Products ($164) ($123) ($41) Cellulose Fibers $42 $48 ($6) Containerboard, Packaging and Recycling $105 $112 ($7) Real Estate ($337) $64 ($401) Corporate and Other $106 ($44) $150 *T -0- *T TIMBERLANDS 2Q 2008 1Q 2008 Change Contribution to pre-tax earnings (millions) $108 $116 ($8) *T

2Q 2008 Performance - Earnings from higher fee volume in the West, largely due to storm salvage efforts, were offset by rising fuel costs and seasonally higher silviculture costs in all operations. Additionally, the West incurred higher logging costs due to the salvage efforts, and log price realizations were slightly lower.

3Q 2008 Outlook - Weyerhaeuser expects third quarter earnings from Timberlands to be slightly higher than second quarter. We expect lower domestic log prices, a seasonal decline in fee harvest volumes, and higher operating costs, offset by an anticipated increase in non-strategic land sales. -0- *T WOOD PRODUCTS 2Q 2008 1Q 2008 Change Contribution (charge) to pre-tax earnings (millions) ($164) ($277) $113 *T

2Q 2008 Performance - Overall demand remained weak as U.S. single-family housing starts fell to a seasonally adjusted annual rate of 670,000 for the second quarter. Excluding the pre-tax items noted below, the segment's loss was $69 million less in the second quarter.

— Second quarter 2008 included charges of $30 million for facility closures and asset impairments.

— First quarter 2008 included charges of $56 million for facility closures and asset impairments and $18 million for a reserve for oriented strand board litigation.

The lower loss from operations was primarily due to higher price realizations for lumber and OSB.

3Q 2008 Outlook - Weyerhaeuser expects challenging market conditions to continue into the third quarter. Operating losses are anticipated to be slightly less than second quarter. -0- *T CELLULOSE FIBERS 2Q 2008 1Q 2008 Change Contribution to pre-tax earnings (millions) $42 $56 ($14) *T

2Q 2008 Performance - Average price realizations for both pulp and liquid packaging board increased. However, this was more than offset by higher expenses associated with scheduled annual maintenance and an increase in freight, energy and fiber costs.

3Q 2008 Outlook - Weyerhaeuser expects third quarter earnings for the segment to be significantly higher than second quarter, primarily due to fewer annual maintenance outages. Average price realizations for both pulp and liquid packaging board are expected to increase, but the benefits are expected to be partially offset by higher chemical costs. -0- *T CONTAINERBOARD, PACKAGING AND RECYCLING 2Q 2008 1Q 2008 Change Contribution to pre-tax earnings (millions) $105 $89 $16 *T

2Q 2008 Performance - Because of the announced sale of the segment's assets to International Paper, the segment's operations are presented as discontinued and depreciation of its assets ceased upon signing the agreement on March 15, 2008. Second quarter results do not include any depreciation. First quarter results included depreciation expense of $61 million. Excluding the effect of depreciation, second quarter earnings for the segment decreased $45 million from first quarter.

The segment had higher expenses for scheduled annual maintenance activities in the second quarter. The segment's earnings were also negatively affected by flooding in the Midwest, which resulted in downtime at two facilities and increased costs. Average packaging price realizations increased, and packaging shipments were seasonally higher.

3Q 2008 Outlook - Weyerhaeuser sold its containerboard, packaging and recycling operations to International Paper on Aug. 4. Third quarter results will only include the segment's operations for July. -0- *T REAL ESTATE 2Q 2008 1Q 2008 Change Contribution (charge) to pre-tax earnings (millions) ($337) ($74) ($263) *T

2Q 2008 Performance - Pre-tax impairments, reserves and land-related charges for homebuilding assets and real estate investments were $311 million in the second quarter compared to $56 million in the first quarter. Excluding these charges, losses from single-family homebuilding operations increased slightly from the first quarter.

Earnings from single-family homebuilding declined due to significantly lower margins. Closings on single-family home sales increased three percent from first quarter. The backlog of homes sold, but not closed, was approximately three and one-half months.

3Q 2008 Outlook - Excluding second quarter impairments, Weyerhaeuser expects a comparable loss from this segment's single-family homebuilding operations in the third quarter.

CORPORATE AND OTHER

Second quarter results for the Corporate and Other segment include the following pre-tax items:

— In April 2008, the company completed the restructuring of joint ventures in Uruguay. Assets of the joint ventures were distributed to the partners in a tax-free transaction. The distribution resulted in a non-cash gain to Weyerhaeuser in the second quarter of $101 million. This gain is based on preliminary values and is subject to adjustment.

— During the second quarter, the company changed its post-retirement benefit plans covering salaried employees and retirees in the United States. The plan changes resulted in a $365 million reduction in post-retirement liabilities and a $52 million pre-tax curtailment gain.

— The company recognized a pre-tax charge of $34 million related to corporate restructuring activities.

— The company recognized a pre-tax charge of $23 million to write off capitalized interest related to impaired Real Estate homebuilding assets.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest forest products companies, was incorporated in 1900. In 2007, sales were $16.3 billion. It has offices or operations in 13 countries, with customers worldwide. Weyerhaeuser is principally engaged in the growing and harvesting of timber; the manufacture, distribution and sale of forest products; and real estate construction, development and related activities. Additional information about Weyerhaeuser's businesses, products and practices is available at http://www.weyerhaeuser.com.

EARNINGS CALL INFORMATION

Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on Aug. 5 to discuss first quarter results.

To access the conference call from within North America, dial 1-800-218-0530 at least 15 minutes prior to the call. Those calling from outside North America should dial 1-303-275-2170. Replays will be available for one week at 1-800-405-2236 (access code - 11116520#) from within North America and at 1-303-590-3000 (access code - 11116520#) from outside North America. The call is being webcast through our website at http://investor.weyerhaeuser.com by clicking on the "Q2 2008 Earnings Conference Call" link.

The webcast is available through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at http://www.fulldisclosure.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson's password-protected site, StreetEvents (http://www.streetevents.com).

FORWARD-LOOKING STATEMENT

This news release contains statements concerning the company's future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of these forward-looking statements can be identified by the use of forward-looking terminology such as "expects," "may," "will," "believes," "should," "approximately," "anticipates," "estimates," and "plans," and the negative or other variations of those terms or comparable terminology or by discussions of strategy, plans or intentions. In particular, some of these forward-looking statements deal with the company's expectations during the third quarter of 2008 regarding the company's markets, earnings and performance of the company's business segments, homebuilding starts, higher costs for energy and silviculture, additional logging and road costs, decreased annual maintenance downtime in the company's Cellulose Fibers facilities, demand and pricing for the company's wood products, increases in freight charges, increases in chemical and fiber costs and related matters. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to:

— The effect of general economic conditions, including the level of interest rates and housing starts;

— Market demand for the company's products, which may be tied to the relative strength of various U.S. business segments;

— Energy prices;

— Raw material prices;

— Chemical prices;

— Performance of the company's manufacturing operations including unexpected maintenance requirements;

— The successful execution of internal performance plans and cost reduction initiatives;

— The level of competition from domestic and foreign producers;

— The effect of forestry, land use, environmental and other governmental regulations, and changes in accounting regulations;

— The effect of weather;

— The risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;

— Transportation costs;

— Legal proceedings;

— The effect of timing of retirements and changes in the market price of company stock on charges for stock-based compensation; and

— Performance of pension fund investments and related derivatives.

The company is also a large exporter and is affected by changes in economic activity in Europe and Asia, particularly Japan, and by changes in currency exchange rates, particularly the relative value of the U.S. dollar to the Euro and the Canadian dollar, and restrictions on international trade or tariffs imposed on imports. These and other factors could cause or contribute to actual results differing materially from such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will occur, or if any of them occurs, what effect they will have on the company's results of operations or financial condition. The company expressly declines any obligation to publicly revise any forward-looking statements that have been made to reflect the occurrence of events after the date of this news release. -0- *T WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) CONSOLIDATED EARNINGS (in millions) —————- REVISED (1) ——————————- —————————- Q1 Q2 ——————————- —————————- March 30, April 1, June 29, July 1, 2008 2007 2008 2007 ——————————- —————————- Net sales and revenues: Weyerhaeuser $ 1,671 $ 2,136 $ 1,820 $ 2,400 Real Estate 371 487 354 559 ——————————- —————————- Total net sales and revenues 2,042 2,623 2,174 2,959 ——————————- —————————- Costs and expenses: Weyerhaeuser: Costs of products sold 1,399 1,757 1,518 1,978 Depreciation, depletion and amortization 145 154 146 148 Selling expenses 59 70 57 69 General and administrative expenses 148 164 125 157 Research and development expenses 17 16 18 18 Charges for restructuring (2) 1 3 39 1 Charges for closure of facilities (3) 53 3 30 16 Impairment of goodwill (4) 3 22 2 - Other operating costs (income), net (5) (6) 46 26 (16) 33 ——————————- —————————- 1,871 2,215 1,919 2,420 ——————————- —————————- Real Estate: Costs and operating expenses 327 379 321 415 Depreciation and amortization 4 6 5 5 Selling expenses 36 41 37 45 General and administrative expenses 29 28 27 27 Other operating costs (income), net (6) (4) 6 4 Impairment of long- lived assets 33 - 246 12 ——————————- —————————- 423 450 642 508 ——————————- —————————- Total costs and expenses 2,294 2,665 2,561 2,928 ——————————- —————————- Operating income (loss) (252) (42) (387) 31 Interest expense and other: Weyerhaeuser: Interest expense incurred (7) (132) (131) (126) (178) Less: interest capitalized 24 30 21 29 Interest income and other (8) 13 20 117 25 Equity in income (loss) of affiliates (5) (1) 3 - Real Estate: Interest expense incurred (12) (12) (14) (17) Less: interest capitalized 12 12 14 17 Interest income and other 1 3 (4) 1 Equity in income (loss) of unconsolidated entities (4) 19 12 13 Charge for impairments of WRI assets (19) (1) (57) (1) ——————————- —————————- Loss from continuing operations before income taxes (374) (103) (421) (80) Income taxes (9) 139 38 214 31 ——————————- —————————- Income (loss) from continuing operations (235) (65) (207) (49) Earnings from discontinued operations, net of taxes (10) 87 785 111 81 ——————————- —————————- Net earnings (loss) $ (148) $ 720 $ (96) $ 32 ===================== =================== Basic net earnings (loss) per share: Continuing operations $ (1.11) $ (0.28) $ (0.98) $ (0.22) Discontinued operations 0.41 3.37 0.53 0.37 ——————————- —————————- Net earnings (loss) per share $ (0.70) $ 3.09 $ (0.45) $ 0.15 ===================== =================== Diluted net earnings (loss) per share: Continuing operations $ (1.11) $ (0.28) $ (0.98) $ (0.22) Discontinued operations 0.41 3.37 0.53 0.37 ——————————- —————————- Net earnings (loss) per share $ (0.70) $ 3.09 $ (0.45) $ 0.15 ===================== =================== Dividends paid per share $ 0.60 $ 0.60 $ 0.60 $ 0.60 ===================== =================== Weighted average shares outstanding (in thousands): Basic 211,195 233,242 211,262 217,688 Diluted 211,195 233,242 211,262 217,688 Common and exchangeable shares outstanding at end of period (in thousands) 211,243 217,726 211,279 217,759 ——————————- —————————- —————- REVISED (1) ——————————- ————- Year-to-date Q3 ——————————- ————- June 29, July 1, Sept. 30, 2008 2007 2007 ——————————- ————- Net sales and revenues: Weyerhaeuser $ 3,491 $ 4,536 $ 2,199 Real Estate 725 1,046 598 ——————————- ————- Total net sales and revenues 4,216 5,582 2,797 ——————————- ————- Costs and expenses: Weyerhaeuser: Costs of products sold 2,917 3,735 1,776 Depreciation, depletion and amortization 291 302 155 Selling expenses 116 139 61 General and administrative expenses 273 321 143 Research and development expenses 35 34 18 Charges for restructuring (2) 40 4 16 Charges for closure of facilities (3) 83 19 19 Impairment of goodwill (4) 5 22 1 Other operating costs (income), net (5) (6) 30 59 5 ——————————- ————- 3,790 4,635 2,194 ——————————- ————- Real Estate: Costs and operating expenses 648 794 451 Depreciation and amortization 9 11 6 Selling expenses 73 86 45 General and administrative expenses 56 55 26 Other operating costs (income), net - - (4) Impairment of long-lived assets 279 12 23 ——————————- ————- 1,065 958 547 ——————————- ————- Total costs and expenses 4,855 5,593 2,741 ——————————- ————- Operating income (loss) (639) (11) 56 Interest expense and other: Weyerhaeuser: Interest expense incurred (7) (258) (309) (131) Less: interest capitalized 45 59 29 Interest income and other (8) 130 45 20 Equity in income (loss) of affiliates (2) (1) 1 Real Estate: - Interest expense incurred (26) (29) (15) Less: interest capitalized 26 29 15 Interest income and other (3) 4 1 Equity in income (loss) of unconsolidated entities 8 32 8 Charge for impairments of WRI assets (76) (2) - ——————————- ————- Loss from continuing operations before income taxes (795) (183) (16) Income taxes (9) 353 69 11 ——————————- ————- Income (loss) from continuing operations (442) (114) (5) Earnings from discontinued operations, net of taxes (10) 198 866 106 ——————————- ————- Net earnings (loss) $ (244) $ 752 $ 101 ===================== ========= Basic net earnings (loss) per share: Continuing operations $ (2.10) $ (0.50) $ (0.02) Discontinued operations 0.94 3.84 0.49 ——————————- ————- Net earnings (loss) per share $ (1.16) $ 3.34 $ 0.47 ===================== ========= Diluted net earnings (loss) per share: Continuing operations $ (2.10) (0.50) $ (0.02) Discontinued operations 0.94 3.84 0.49 ——————————- ————- Net earnings (loss) per share $ (1.16) $ 3.34 $ 0.47 ===================== ========= Dividends paid per share $ 1.20 $ 1.20 $ 0.60 ===================== ========= Weighted average shares outstanding (in thousands): Basic 211,228 225,465 215,154 Diluted 211,228 225,465 215,154 Common and exchangeable shares outstanding at end of period (in thousands) 211,279 217,759 211,106 ——————————- ————- ————- —————— Q4 Year-to-date ————- —————— Dec. 30, Dec. 30, 2007 2007 ————- —————— Net sales and revenues: Weyerhaeuser $ 1,839 $ 8,574 Real Estate 715 2,359 ————- —————— Total net sales and revenues 2,554 10,933 ————- —————— Costs and expenses: Weyerhaeuser: Costs of products sold 1,553 7,064 Depreciation, depletion and amortization 140 597 Selling expenses 73 273 General and administrative expenses 149 613 Research and development expenses 19 71 Charges for restructuring (2) 15 35 Charges for closure of facilities (3) 78 116 Impairment of goodwill (4) 7 30 Other operating costs (income), net (5) (6) (34) 30 ————- —————— 2,000 8,829 ————- —————— Real Estate: Costs and operating expenses 507 1,752 Depreciation and amortization 6 23 Selling expenses 48 179 General and administrative expenses 18 99 Other operating costs (income), net 2 (2) Impairment of long-lived assets 93 128 ————- —————— 674 2,179 ————- —————— Total costs and expenses 2,674 11,008 ————- —————— Operating income (loss) (120) (75) Interest expense and other: Weyerhaeuser: Interest expense incurred (7) (132) (572) Less: interest capitalized 30 118 Interest income and other (8) 18 83 Equity in income (loss) of affiliates (5) (5) Real Estate: Interest expense incurred (13) (57) Less: interest capitalized 13 57 Interest income and other (6) (1) Equity in income (loss) of unconsolidated entities 15 55 Charge for impairments of WRI assets (28) (30) ————- —————— Loss from continuing operations before income taxes (228) (427) Income taxes (9) 96 176 ————- —————— Income (loss) from continuing operations (132) (251) Earnings from discontinued operations, net of taxes (10) 69 1,041 ————- —————— Net earnings (loss) $ (63) $ 790 ========= ============ Basic net earnings (loss) per share: Continuing operations $ (0.63) $ (1.15) Discontinued operations 0.33 4.75 ————- —————— Net earnings (loss) per share $ (0.30) $ 3.60 ========= ============ Diluted net earnings (loss) per share: Continuing operations $ (0.63) $ (1.15) Discontinued operations 0.33 4.75 ————- —————— Net earnings (loss) per share $ (0.30) $ 3.60 ========= ============ Dividends paid per share $ 0.60 $ 2.40 ========= ============ Weighted average shares outstanding (in thousands): Basic 211,135 219,305 Diluted 211,135 219,305 Common and exchangeable shares outstanding at end of period (in thousands) 211,147 211,147 ————- —————— *T -0- *T WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) FOOTNOTES TO CONSOLIDATED EARNINGS (in millions) (1) First quarter 2007 results were revised to reflect an adjustment to reduce the net gain on the Domtar Transaction by $35 million after-tax. This adjustment is included in discontinued operations. (2) See detail of restructuring charges by segment on page 4. (3) See detail of closure charges by segment on page 4. (4) The first quarter of 2007 includes a charge of $22 million for the impairment of goodwill associated with Canadian Wood Products distribution facilities. Goodwill impairment charges recognized in the third and fourth quarters of 2007 and the first and second quarters of 2008 were associated with U.S. Wood Products distribution facilities. (5) Includes net foreign exchange gains (losses), primarily from fluctuations in Canadian and New Zealand exchange rates: ———————- Year-to-date ———————- ———————- ———————- Q1 2008 Q1 2007 Q2 2008 Q2 2007 Q2 2008 Q2 2007 ———————- ———————- ———————- $(11) $7 $3 $29 $(8) $36 ———————- ———————- ———————- —————— Year-to-date ———- ———- —————— Q3 2007 Q4 2007 Q4 2007 ———- ———- —————— $2 $1 $39 ———- ———- —————— (6) (a) The first quarter of 2008 includes charges of $18 million related to OSB litigation and $17 million for a change in accounting for our environmental remediation reserves. (b) The second quarter of 2008 includes a gain of $52 million related to changes in postretirement benefit plans for salaried employees and a gain of $7 million on sale of properties. (c) The first and second quarters of 2008 include charges of $5 million and $23 million, respectively, for the impairment of previously capitalized interest on Real Estate assets. (d) The first, second, and fourth quarters of 2007 include $34 million, $12 million, and $6 million, respectively, in asset impairments related to Wood Products facilities. (e) The second quarter of 2007 includes a $40 million charge for legal settlements and a contract termination and $6 million in additional charges related to the sale of Canadian Wood Products distribution facilities. (f) The third quarter of 2007 includes gains of $9 million on the sale of previously closed facility sites, a $4 million charge for a legal settlement and charges of $13 million to transition to a new IT service provider. (g) The fourth quarter of 2007 includes a charge of $10 million for storm-related casualty losses, a gain of $27 million on the sale of an export facility, and gains of $12 million on sales of operations including our New Zealand joint venture. (7) The second quarter of 2007 includes a $42 million charge related to the early extinguishment of debt. (8) The second quarter of 2008 includes an estimated pre-tax gain of $101 million from the restructuring of our investments in Uruguay. (9) (a) The second quarter of 2008 includes a $14 million tax benefit related to the release of FIN 48 tax liabilities. (b) The fourth quarter of 2007 includes a one-time tax benefit of $22 million related to a reduction in the Canadian federal income tax rate. (10) Discontinued operations include the net operating results of the Containerboard, Packaging and Recycling business and our Australia operations for all periods presented. Discontinued operations for the first quarter of 2007 also include the net operating results of the Fine Paper business and related assets. Results of discontinued operations exclude certain general corporate overhead costs that have been allocated to and are included in contribution to earnings for the operating segments. Discontinued operations also include an allocation of net pension and postretirement income or expense. Discontinued operations related to Containerboard, Packaging and Recycling do not include any allocation of interest expense. Summary results of discontinued operations: ————————— ———————— ———————— Q1 Q2 Year-to-date ————————— ———————— ———————— March 30, April 1, June 29, July 1, June 29, July 1, 2008 2007 2008 2007 2008 2007 ————————— ———————— ———————— Net sales $ 1,351 $ 1,831 $ 1,436 $1,375 $ 2,787 $ 3,206 Net earnings from operations (after-tax) $ 87 $ 64 $ 111 $ 85 $ 198 $ 149 Net gain (loss) on divestiture (after-tax) $ - $ 721 $ - $ (4) $ - $ 717 Net earnings from discontinued operations $ 87 $ 785 $ 111 $ 81 $ 198 $ 866 ————————— ———————— ———————— ————- ———— —————— Q3 Q4 Year-to-date ————- ———— —————— Sept. 30, Dec. 30, Dec. 30, 2007 2007 2007 ————- ———— —————— Net sales $ 1,349 $ 1,383 $ 5,938 Net earnings from operations (after- tax) $ 106 $ 91 $ 346 Net gain (loss) on divestiture (after-tax) $ - $ (22) $ 695 Net earnings from discontinued operations $ 106 $ 69 $ 1,041 ————- ———— —————— (a) The second quarter of 2007 includes a $29 million gain on the sale of a previously closed box plant site. (b) The third quarter of 2007 includes pre-tax income of $43 million from the settlement of litigation associated with an Ontario fine paper mill. (c) The fourth quarter of 2007 includes a one-time charge of $9 million related to a change in Mexican federal income tax laws. *T -0- *T WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) NET SALES AND REVENUES: (in millions) ————————— ————————- Q1 Q2 ————————— ————————- March 30, April 1, June 29, July 1, 2008 2007 2008 2007 ————————— ————————- Timberlands: Logs $ 143 $ 170 $ 172 $ 172 Other products 51 63 42 39 ————————— ————————- 194 233 214 211 ————————— ————————- Wood Products: Softwood lumber 361 574 403 647 Engineered solid section 105 155 121 185 Engineered I-Joists 73 117 86 147 Oriented strand board 105 152 110 153 Plywood 57 100 59 106 Hardwood lumber 80 90 80 99 Other products produced 49 50 51 64 Other products purchased for resale 136 232 161 261 ————————— ————————- 966 1,470 1,071 1,662 ————————— ————————- Cellulose Fibers: Pulp 345 405 355 370 Liquid packaging board 67 56 74 72 Other products 33 21 31 28 ————————— ————————- 445 482 460 470 ————————— ————————- Fine Paper: (1) Paper - 432 - - Coated groundwood - 26 - - Other products - 1 - - ————————— ————————- - 459 - - ————————— ————————- Containerboard, Packaging and Recycling: Containerboard 141 119 118 109 Packaging 987 951 1,074 1,043 Recycling 113 94 121 103 Bags 23 23 24 23 Other products 33 39 38 49 ————————— ————————- 1,297 1,226 1,375 1,327 ————————— ————————- Real Estate 371 487 354 559 Corporate and Other 120 97 136 105 Less: sales of discontinued operations (1,351) (1,831) (1,436) (1,375) ————————— ————————- $ 2,042 $ 2,623 $ 2,174 $ 2,959 ================== ================= ————————- ————- ———— —————— Year-to-date Q3 Q4 Year-to-date ————————- ————- ———— —————— June 29, July 1, Sept. 30, Dec. 30, Dec. 30, 2008 2007 2007 2007 2007 ————————- ————- ———— —————— Timberlands: Logs $ 315 $ 342 $ 168 $ 149 $ 659 Other products 93 102 81 68 251 ————————- ————- ———— —————— 408 444 249 217 910 ————————- ————- ———— —————— Wood Products: Softwood lumber 764 1,221 580 440 2,241 Engineered solid section 226 340 155 113 608 Engineered I- Joists 159 264 124 79 467 Oriented strand board 215 305 151 133 589 Plywood 116 206 89 71 366 Hardwood lumber 160 189 89 77 355 Other products produced 100 114 61 51 226 Other products purchased for resale 297 493 200 154 847 ————————- ————- ———— —————— 2,037 3,132 1,449 1,118 5,699 ————————- ————- ———— —————— Cellulose Fibers: Pulp 700 775 345 358 1,478 Liquid packaging board 141 128 61 58 247 Other products 64 49 30 28 107 ————————- ————- ———— —————— 905 952 436 444 1,832 ————————- ————- ———— —————— Fine Paper: (1) Paper - 432 - - 432 Coated groundwood - 26 - - 26 Other products - 1 - - 1 ————————- ————- ———— —————— - 459 - - 459 ————————- ————- ———— —————— Containerboard, Packaging and Recycling: Containerboard 259 228 99 130 457 Packaging 2,061 1,994 1,015 1,010 4,019 Recycling 234 197 106 110 413 Bags 47 46 23 27 96 Other products 71 88 50 45 183 ————————- ————- ———— —————— 2,672 2,553 1,293 1,322 5,168 ————————- ————- ———— —————— Real Estate 725 1,046 598 715 2,359 Corporate and Other 256 202 121 121 444 Less: sales of discontinued operations (2,787) (3,206) (1,349) (1,383) (5,938) ————————- ————- ———— —————— $ 4,216 $ 5,582 $ 2,797 $ 2,554 $ 10,933 ================= ========= ======== ============ (1) First quarter 2007 results include 9 weeks of operations for the Fine Paper business and related assets, prior to the distribution of these assets to Weyerhaeuser shareholders. *T -0- *T WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) CONTRIBUTION (CHARGE) TO PRE-TAX EARNINGS: (in millions) —————- REVISED (1) ——————————- ———————— Q1 Q2 ——————————- ———————— March 30, April 1, June 29, July 1, 2008 2007 2008 2007 ——————————- ———————— Timberlands (2) (3) (4) (6) (7) $ 116 $ 175 $ 108 $ 142 Wood Products (2) (3) (4) (6) (8) (277) (167) (164) (123) Cellulose Fibers (2) (3) (4) (6) 56 22 42 48 Fine Paper (2) (3) (6) - 20 - - Containerboard, Packaging and Recycling (2) (3) (4) (6) (9) 89 67 105 112 Real Estate (4) (6) (10) (74) 58 (337) 64 Corporate and Other (2) (3) (4) (5) (6) (11) (45) 580 106 (44) ——————————- ———————— $ (135) $ 755 $ (140) $ 199 ===================== ================ —————- REVISED (1) —————————— ————- ———— —————— Year-to-date Q3 Q4 Year-to-date —————————— ————- ———— —————— June 29, July 1, Sept. 30, Dec. 30, Dec. 30, 2008 2007 2007 2007 2007 —————————— ————- ———— —————— Timberlands (2) (3) (4) (6) (7) $ 224 $ 317 $ 165 $ 152 $ 634 Wood Products (2) (3) (4) (6) (8) (441) (290) (131) (313) (734) Cellulose Fibers (2) (3) (4) (6) 98 70 79 80 229 Fine Paper (2) (3) (6) - 20 - - 20 Containerboard, Packaging and Recycling (2) (3) (4) (6) (9) 194 179 104 99 382 Real Estate (4) (6) (10) (411) 122 60 22 204 Corporate and Other (2) (3) (4) (5) (6) (11) 61 536 (16) (52) 468 —————————— ————- ———— —————— $ (275) $ 954 $ 261 $ (12) $ 1,203 ==================== ========= ======== ============ FOOTNOTES TO CONTRIBUTION (CHARGE) TO PRE-TAX EARNINGS (in millions) (1) First quarter 2007 results were revised to reflect an adjustment to reduce the pre-tax gain on the Domtar Transaction by $53 million. This adjustment is included in Corporate and Other. (2) Restructuring charges (reversals) by segment: ———————- ———————- Q1 2008 Q1 2007 Q2 2008 Q2 2007 ———————- ———————- Timberlands $ - $ - $ - $ 1 Wood Products - 2 4 - Cellulose Fibers - - - - Fine Paper - - - - Containerboard, Packaging and Recycling - - - 1 Corporate and Other 1 1 35 - ———————- ———————- $ 1 $ 3 $ 39 $ 2 =============== =============== ———————- —————— Year-to-date Year-to-date ———————- ———- ———- —————— Q2 2008 Q2 2007 Q3 2007 Q4 2007 2007 ———————- ———- ———- —————— Timberlands $ - $ 1 $ 2 $ (2) $ 1 Wood Products 4 2 4 14 20 Cellulose Fibers - - 3 - 3 Fine Paper - - - - - Containerboard, Packaging and Recycling - 1 1 - 2 Corporate and Other 36 1 6 4 11 ———————- ———- ———- —————— $ 40 $ 5 $ 16 $ 16 $ 37 =============== ======= ======= ============ The above restructuring charges include costs incurred within the company's discontinued operations. (3) Closure charges (reversals) by segment: ———————- ———————- Q1 2008 Q1 2007 Q2 2008 Q2 2007 ———————- ———————- Timberlands $ - $ - $ - $ - Wood Products 53 3 30 15 Cellulose Fibers - - - - Fine Paper - 2 - - Containerboard, Packaging and Recycling 8 2 3 3 Corporate and Other - - - 1 ———————- ———————- $ 61 $ 7 $ 33 $ 19 =============== =============== ———————- —————— Year-to-date Year-to-date ———————- ———- ———- —————— Q2 2008 Q2 2007 Q3 2007 Q4 2007 2007 ———————- ———- ———- —————— Timberlands $ - $ - $ - $ - $ - Wood Products 83 18 19 78 115 Cellulose Fibers - - (1) - (1) Fine Paper - 2 - - 2 Containerboard, Packaging and Recycling 11 5 - 4 9 Corporate and Other - 1 1 (1) 1 ———————- ———- ———- —————— $ 94 $ 26 $ 19 $ 81 $ 126 =============== ======= ======= ============ The above closure charges include costs incurred within the company's discontinued operations. (4) Share-based compensation charges recognized by segment: ———————- ———————- Q1 2008 Q1 2007 Q2 2008 Q2 2007 ———————- ———————- Timberlands $ 1 $ 1 $ - $ - Wood Products 3 2 2 2 Cellulose Fibers 2 2 - - Containerboard, Packaging and Recycling 3 1 2 2 Real Estate 2 2 1 1 Corporate and Other 15 14 2 5 ———————- ———————- $ 26 $ 22 $ 7 $ 10 =============== =============== ———————- —————— Year-to-date Year-to-date ———————- ———- ———- —————— Q2 2008 Q2 2007 Q3 2007 Q4 2007 2007 ———————- ———- ———- —————— Timberlands $ 1 $ 1 $ 1 $ - $ 2 Wood Products 5 4 1 1 6 Cellulose Fibers 2 2 - 1 3 Containerboard, Packaging and Recycling 5 3 1 1 5 Real Estate 3 3 - 1 4 Corporate and Other 17 19 - 2 21 ———————- ———- ———- —————— $ 33 $ 32 $ 3 $ 6 $ 41 =============== ======= ======= ============ (5) Net foreign exchange gains (losses) included in Corporate and Other: ———————- ———————- Q1 2008 Q1 2007 Q2 2008 Q2 2007 ———————- ———————- $ (11) $ 7 $ 4 $ 35 ———————- ———————- ———————- —————— Year-to-date Year-to-date ———————- ———- ———- —————— Q2 2008 Q2 2007 Q3 2007 Q4 2007 2007 ———————- ———- ———- —————— $ (7) $ 42 $ 2 $ - $ 44 ———————- ———- ———- —————— (6) Effective with the first quarter of 2008, the company's pension credits (costs) are no longer being allocated to the Weyerhaeuser operating segments. Total pension credits (costs) are reported in the Corporate and Other segment. Pension credits (costs) related to real estate operations are reported in the Real Estate segment. Pension credits (costs) recognized by segment: ———————- ———————- Q1 2008 Q1 2007 Q2 2008 Q2 2007 ———————- ———————- Timberlands $ - $ 1 $ - $ 1 Wood Products - 5 - 11 Cellulose Fibers - - - 4 Fine Paper - 1 - - Containerboard, Packaging and Recycling - 3 - 10 Real Estate 1 - - - Corporate and Other 38 - 29 1 ———————- ———————- $ 39 $ 10 $ 29 $ 27 =============== =============== ———————- —————— Year-to-date Year-to-date ———————- ———- ———- —————— Q2 2008 Q2 2007 Q3 2007 Q4 2007 2007 ———————- ———- ———- —————— Timberlands $ - $ 2 $ 1 $ - $ 3 Wood Products - 16 13 10 39 Cellulose Fibers - 4 2 2 8 Fine Paper - 1 - - 1 Containerboard, Packaging and Recycling - 13 9 8 30 Real Estate 1 - (1) - (1) Corporate and Other 67 1 - - 1 ———————- ———- ———- —————— $ 68 $ 37 $ 24 $ 20 $ 81 =============== ======= ======= ============ *T -0- *T WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) FOOTNOTES TO CONTRIBUTION (CHARGE) TO PRE-TAX EARNINGS (CONTINUED) (in millions) (7) Additional Timberlands notes: 2007: (a) The fourth quarter includes a charge of $10 million for storm-related casualty losses and a gain of $27 million on the sale of an export facility. (8) Additional Wood Products notes: 2008: (a) The first quarter includes a charge of $18 million for a reserve for litigation. (b) The second quarter includes a gain of $7 million on the sale of property. 2007: (c) The first quarter includes charges of $22 million for the impairment of goodwill associated with Canadian distribution facilities and $34 million in asset impairments related to Wood Products facilities. (d) The second quarter includes a charge of $17 million for the settlement of litigation, charges of $12 million in asset impairments related to Wood Products facilities and $6 million in additional charges related to the sale of Canadian distribution facilities. (e) The third quarter includes $7 million of income from the sale of a veneer facility and a previously closed distribution center site, charges of $4 million for the settlement of litigation and $4 million for restructuring activities. (f) The fourth quarter includes charges of $14 million for restructuring activities, $7 million in goodwill impairments, $6 million in asset impairments and a gain of $3 million on the sale of a facility. (9) Additional Containerboard, Packaging and Recycling notes: 2008: (a) The first quarter includes an $11 million benefit resulting from the cessation of depreciation on assets held for sale and $6 million of insurance proceeds related to a fire at the Closter, NJ box plant. (b) The second quarter includes a $72 million benefit resulting from the cessation of depreciation on assets held for sale, income of $5 million from the sale of property, and charges of $6 million for litigation expenses. 2007: (c) The second quarter includes a $29 million gain on the sale of a previously closed box plant site in California and $3 million in charges related to a fire at the Closter, NJ box plant. (d) The third quarter includes $3 million of income related to the sale of a previously closed box plant site. (10) Additional Real Estate notes: 2008: (a) The first quarter includes charges of $33 million for the impairment of homebuilding assets and $19 million related to WRI investment activities. (b) The first and second quarters include net gains (losses) on land and lot sales of $(2) million and $0 million, respectively, or $(2) million year-to-date. (c) The second quarter includes charges of $254 million for the impairment of homebuilding and land-related assets and $57 million related to WRI investment activities. 2007: (d) The first, second, third, and fourth quarters include net gains on land and lot sales of $3 million, $3 million, $30 million, and $79 million, respectively, or $115 million year- to-date. (e) The second quarter includes a gain of $42 million on the sale of an apartment project. (f) The first, second, third, and fourth quarters include charges for the impairment of long-lived assets and investments of $2 million, $13 million, $23 million, and $121 million, respectively, or $159 million year-to-date. (11) Additional Corporate and Other notes: 2008: (a) The first quarter includes charges of $17 million for a change in accounting for environmental remediation liability reserves and $5 million for the impairment of interest that was previously capitalized on Real Estate assets. (b) The second quarter includes a $101 million estimated pre-tax gain from the restructuring of our investments in Uruguay, a $52 million pre-tax gain from changes in our postretirment benefit plans covering salaried employees, a charge of $35 million for corporate restructuring activities, and a charge of $23 million for the impairment of interest that was previously capitalized on Real Estate assets. 2007: (c) The first quarter includes a $629 million pre-tax gain, the second quarter includes charges of $4 million, and the fourth quarter includes charges of $19 million related to the distribution of the Fine Paper business and related assets to Weyerhaeuser shareholders. (d) The second quarter includes a $23 million charge for legal settlements and a contract termination. (e) The third quarter includes a $43 million gain on the settlement of litigation and charges of $20 million for restructuring activities and the transition to a new IT service provider. (f) The fourth quarter includes a gain of $9 million on the sale of our New Zealand joint venture. *T -0- *T WEYERHAEUSER COMPANY STATISTICAL INFORMATION (unaudited) THIRD PARTY SALES VOL

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